Advertisement
New Zealand markets closed

  • NZX 50

    11,796.21
    -39.83 (-0.34%)
     

  • NZD/USD

    0.5893
    -0.0013 (-0.21%)
     

  • NZD/EUR

    0.5525
    -0.0020 (-0.35%)
     

  • ALL ORDS

    7,817.40
    -81.50 (-1.03%)
     

  • ASX 200

    7,567.30
    -74.80 (-0.98%)
     

  • OIL

    83.73
    +1.00 (+1.21%)
     

  • GOLD

    2,413.70
    +15.70 (+0.65%)
     

  • NASDAQ

    17,134.09
    -260.23 (-1.50%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • Dow Jones

    37,989.55
    +214.17 (+0.57%)
     

  • DAX

    17,737.36
    -100.04 (-0.56%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • NZD/JPY

    91.0650
    -0.1890 (-0.21%)
     

Should You Invest in the Invesco S&P 500 Equal Weight Materials ETF (RTM)?

Zacks Equity Research
·4-min read

Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Materials ETF (RTM) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $664.72 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. RTM seeks to match the performance of the S&P 500 Equal Weight Materials Index before fees and expenses.

ADVERTISEMENT

The S&P 500 Equal Weight Materials Index is an unmanaged equal weighted version of the S&P 500 Materials Index that consists of the common stocks of the following industries: chemicals, construction materials, containers and packaging, metals and mining, and paper and forest products that comprise the Materials sector of the S&P 500 Index.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.29%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Materials sector--about 99.40% of the portfolio.

Looking at individual holdings, Newmont Corp (NEM) accounts for about 3.73% of total assets, followed by Air Products And Chemicals Inc (APD) and International Flavors & Fragrances Inc (IFF).

The top 10 holdings account for about 36.60% of total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P 500 Equal Weight Materials ETF return is roughly 26.76% so far, and it's up approximately 74.80% over the last 12 months (as of 05/28/2021). RTM has traded between $98.08 and $177.38 in this past 52-week period.

The ETF has a beta of 1.12 and standard deviation of 27.99% for the trailing three-year period, making it a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco S&P 500 Equal Weight Materials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RTM is a great option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.45 billion in assets, Materials Select Sector SPDR ETF has $9.61 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.12%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
INVS-SP5 EW MTL (RTM): ETF Research Reports
 
International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report
 
Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report
 
Newmont Corporation (NEM) : Free Stock Analysis Report
 
SPDR-MATLS SELS (XLB): ETF Research Reports
 
FLEXS-MRN GUNR (GUNR): ETF Research Reports
 
To read this article on Zacks.com click here.